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Krispy Kreme Doughtnuts Krispy Kreme Doughtnuts (KKD)(KKD)
Matt Pregozen
Krispy Kreme Krispy Kreme RecommendationRecommendationBuy: Limit at $3.65Sell: Limit at $4.35
BackgroundBackground1937- Vernon Rudolph bought secret
yeast recipe from a French chef in New Orleans
Expanded from local store to nation wide chain of stores
Headquartered in Winston Salem, North Carolina
580 stores worldwide in 18 countries93 company owned and 430
franchisees2,700 full time employees
Source: http://finance.yahoo.com/q/pr?s=KKD http://www.krispykreme.com/history.html
Business OperationsBusiness OperationsRetailer and Wholesaler of
Doughnuts and Sweets20 varieties of doughnuts
(packaged and unpackaged)
Sells own brand of coffeeSells equipment and
supplies to franchisesHave donut fundraisers
with youth groups
Source: http://finance.yahoo.com/q/pr?s=KKD
RetailRetailStandalone store with seatingMakes donuts fresh in store
Source: http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=KKD
WholesaleWholesaleSold at supermarkets,
convenience stores, gas stations, Wal-Mart, and Target
Deliver boxed doughnuts and unpackaged donuts daily
Source: http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=KKD
Stock NumbersStock NumbersCurrent Price:
$4.21P/E Ratio: N/ABeta: 1.86EPS: -$0.0152-Week Low: $1.3452-Week High: $4.75Market Cap:
$256.94MInstitutional Ownership: 29%
As of 3/18/2010 from Google Finance
1 Month1 Month
Yahoo Finance: http://finance.yahoo.com/echarts
3 Month3 Month
Yahoo Finance: http://finance.yahoo.com/echarts
6 Month6 Month
Yahoo Finance: http://finance.yahoo.com/echarts
KKD (Blue) KKD (Blue) vs vs Starbucks Starbucks (Red) (Red) vs vs Tim Hortons (Green)Tim Hortons (Green)
Yahoo Finance: http://finance.yahoo.com/echarts
CompetitorsCompetitorsDunkin Donuts- Privately owned
Starbucks- coffee shop with 8,800 worldwide locations◦Over expanded- downsizing and consolidating◦Current products are too expensive for
consumers
Tim Hortons- fast food restaurant in USA and Canada◦Saturated market in Canada with 3,015 stores◦Expansion in US faces tough competition
Source: http://www.reuters.com/finance/stocks/ http://voices.washingtonpost.com/economy-watch/2009/01/starbucks_closing_hundreds_of.html and http://money.cnn.com/news/newsfeeds/articles/reuters/MTFH12232_2010-03-05_17-15-23_N05193145.htm
Social ResponsibilitySocial ResponsibilityGave away free donuts during
2008 Election if you voted
Source: http://www.usatoday.com/money/industries/retail/2008-11-03-voter-free-stuff_N.htm
Reasons to BuyReasons to BuyJob market is recovering =
doughnuts and coffee at officeRumor that Wendy’s will buy
Krispy KremeIn the middle of restructuring, so
future has potentialUpcoming Earnings Report
3/29/2010Source: http://www.dispatch.com/live/content/business/stories/2009/11/27/WENDYS_KRISPY.ART_ART_11-27-09_A16_MPFQ789.html and http://investor.krispykreme.com/
VAR (Value Added VAR (Value Added Research)Research)
Original Glazed Donut Taste Test
Label Votes Brand
A 13
B 5
QuoteQuote
“Donuts. Is there anything they can’t do?”
-Homer Simpson